Malaysian palm oil futures rose 1 percent by close of trade on Wednesday, reversing losses from earlier in the day to chart a fourth straight day of gains on expectations that Malaysia's crude palm oil export duty for September could be a zero rate. The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was up 1 percent at 2,258 ringgit ($554.25) a tonne in the evening. The market earlier climbed to 2,265 ringgit, palm's strongest levels since July 10, helped too by a technical rebound.
Trading volumes stood at 70,765 lots of 25 tonnes each at the end of the trading day. "The market jumped on a technical rebound, plus traders expect that September's export duty could be zero," said a futures trader in Kuala Lumpur, referring to Malaysia's export duty on crude palm oil which was last set at a 4.5 percent rate in August.
Malaysia, the world's second largest palm oil producer, sets a monthly export duty for crude palm oil, but a zero rate is incurred if palm prices fall below 2,250 ringgit. Benchmark palm prices have been trading below 2,250 ringgit in the past month. Its average price for the month of July is 2,251 ringgit, according to Eikon data.
In other related oils, the Chicago December soyabean oil contract rose 0.3 percent, while the January soyabean oil contract on China's Dalian Commodity Exchange was up 0.5 percent. Meanwhile, the Dalian January palm oil contract edged up 0.6 percent. Palm oil prices are impacted by movements of other edible oils, as they compete for a share in the global vegetable oils market.
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